The People of America's Oil and Natural Gas Indusry

Innovation, Technology Lead U.S. Energy Renaissance

Mark Green

Mark Green
Posted November 7, 2016

The degree to which industry innovation and advanced technology is driving America’s energy renaissance is a good-news story that doesn’t get enough attention. Let’s see if we can take a step in that direction.

First, the U.S. Energy Information Administration (EIA) says that U.S. field production of oil totaled more than 3.4 billion barrels in 2015, the highest level since 1972:

oil_production

EIA:

U.S. field production of crude oil increased in 2015 for the seventh consecutive year, reaching 9.42 million barrels per day (b/d). This was the highest crude oil production level since 1972, based on final production numbers in EIA’s Petroleum Supply Annual. In 2015, production gains were highest in Texas, the Gulf of Mexico, and North Dakota, as these three regions accounted for 77% of the U.S. total increase.

The country’s largest oil-producing states showed the largest production gains in 2015 compared to 2014:

state_oil_production_changes

Similarly, U.S. natural gas production last year was an all-time high, 27,059,503 million cubic feet:

natgas_production

Here’s where the innovation/technology comes into play. In terms of oil production, EIA says that nearly 80 percent of the most prolific U.S. wells (those producing more than 400 barrels of oil per day) were horizontally drilled:

horizontal_wells

EIA:

Although modern horizontal drilling achieved commercial success in the 1980s, drilling techniques have improved, and in recent years, horizontal drilling has become more common. Geologic formations are almost always much greater in horizontal extent than they are in vertical thickness. For this reason, more oil-bearing rock is exposed for production in horizontal drilling than in vertical drilling. Horizontal wells are often completed in combination with hydraulic fracturing to maximize production along the exposed rock formation.

And more than just total numbers, EIA data shows drillers are doing more with less – that is, new energy production in key areas is increasing with fewer drilling rigs. For example, in the Marcellus Basin an operating drilling rig in 2016 added an average of 12 million cubic feet per day of new natural gas production per month – six times higher than the productivity in 2011:

marcellus_productivity

In the Bakken, an operating drilling rig in 2016 added an average of 225 barrels per day of new oil production – 4.5 times higher than the productivity in 2011:

bakken_productivity

Credit virtually all of the above to industry that is constantly seeking ways to safely and responsibly increase production and productivity through improved drilling technology and overall operations. The ability to drill horizontally a mile or more in multiple directions from a single vertical well has significantly boosted both production and productivity while allowing a smaller surface footprint.

America’s energy renaissance is an innovation and technological revolution – one that has made the United States the world’s leading oil and natural gas producer. As a result our economy is stronger and our nation is more energy secure – even as increased use of cleaner-burning natural gas has made it possible for the U.S. to lower its energy-related carbon dioxide emissions to their lowest level in nearly 25 years.

To continue these energy trends, the U.S. needs forward-looking policies that increase access to energy reserves including the Alaskan Arctic, a commonsense approach to regulation and leasing and permitting rules that provide reasonable certainty that will encourage more innovation, risk-taking and investment in America’s energy future.

ABOUT THE AUTHOR

Mark Green joins API after spending 16 years as national editorial writer in the Washington Bureau of The Oklahoman newspaper. In all, he has been a reporter and editor for more than 30 years, including six years as sports editor at The Washington Times. He lives in Occoquan, Virginia, with his wife Pamela. Mark graduated from the University of Oklahoma with a degree in journalism and earned a masters in journalism and public affairs at American University. He's currently working on a masters in history at George Mason University, where he also teaches as an adjunct professor in the Communication Department.